CFB - Earnings call transcript Q4 2020 | CrossFirst Bankshares, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by, and welcome to the CrossFirst Bankshares Fourth Quarter Earnings call. [Operator Instructions] Thank you. I would like to hand the conference over to your speaker today, Mr. Matt Needham, please go ahead.

Matt Needham

Welcome, and thank you for joining us today on the call.

have Officer; President Chief and we O’Toole, CEO; Credit call, Financial Chief Randy the Mike and Maddox, Dave Officer. On Rapp, our

along and reminder, our website on for a a period replay Relations this As of extended time. telephonic our Investor earnings will presentation, call, release an be available of with

call I measures in provide SEC differ our statement. to forward-looking nearest our Reconciliations this afternoon, Relations that non-GAAP factors financial a measures number to and available website. release would of available of share are filings, want to involve All which which today of let uncertainties results which GAAP accompany this cause that included risk materially presentation discussing underway, be get that discussed on we diluted earnings from on remarks also turn on list cautionary may the to Maddox. Relations review. comprehensive encourage a slides metrics CrossFirst remind to count actually the you X our share and are presentation you risks our all website. release, that is like we forward-looking our Before or me presentation, of information, are a Mike provided basis. quarterly the in We the Investor our now to per I per copies in are over Investor our investor of Slide update I call comparable will statements.

Mike Maddox

family, and in best City want to luck being the the to Steve Thank Hunt you, we from call here of Super I Kansas start off the the Director Chiefs, City, Bowl. the our Capel, afternoon love would Kansas Matt. wish this

we and the getting excited, Super Bowl really to thing. are used We are

like today XXXX. and book health their to we So looking wishing would forward wellness clients, shareholders, Sunday. to and and look the on forward to by XXXX families, employees our begin we as I are next close

extremely when year proud have been an for where to difficult was so back for we looking XXXX. fortunate Although it thankful be much at and many, of

and and hall CrossFirst in other, Brown taking separation environment unprecedented and Fame have persevered and communities. tell used to the This care Coach attached you the at team to Our heights, to no adapted Larry order you to organization the while of our each of our teammate. your hip with new to clients between drove succeed, be us,

common run in So have you are a goal working words than all team a winning. truer together never Coach’s as with of XXXX.

values. true to Our long-term on core and our dependent success staying foundation is

a and of founding competence commitment lead strong pillars Our combined culture, connection, to character, extraordinary with team an focused company.

execute on enhance plan. to and our remain have more are future be shared one vision our working for I since further that overall cannot and profitability. together, to this Board committed believe to our inception, of statement, moving exemplify allowed our us We and our be we look towards I team bank to that XXXX employees one CrossFirst success. and for and advantages core performance Directors our our strategic successful We excited

our us company. to grow business to technology approach efficiencies we forward to model, expect branch-light lead and the future committed are the and We operate we in as greater our

in our to Chief was structure sales, Peterson Officer, getting Steve our activity. quarter, focused and the the oversee market team I XXXX, local on marketing, During third promoted and corporate right In we Banking place. to

initiatives. Technology of excited yesterday hiring started are announce strategic to who will lead technology Chief our our the Jana We new also and Merfin, Officer,

Bankshares in people of deadly we a been ways. in company. the of extraordinary pleased to professionally. months, a purpose serving of our with customers I help have have lost CEO honor Jana taking our knowledge experienced recession employees We want very a dedicated and technology CrossFirst pandemic-induced thrilled for we as CrossFirst lead experience to worked on of bring It navigate being $X a some her to of continue and that focus resilience assets hours With their pandemic, in only is seven in total are our that I’m loans. past billion forward $X success of of an remote care never But year have I to challenges collaboration. employees positives throughout XXXX. also team sight who and and celebrate stories significant a while and our their the the passionate and to We power mind, economic work, personally were The long school own and CrossFirst resilience, and other highlight XXXX. in families. our the to Despite of all individual trust us surpassed virtual customers exhibited challenged testament efforts billion and of

Our and pandemic in plan team banking Wichita pass assets, making our our executed to have market believe relationships location it the in surpassed third billion We and milestone. developed. We this developed on our experienced $X they The highest difficult continues future. another the bank’s for million, build cycle. successfully in are reserves a loss level adding at company through the are to history. after the navigating loan and reserves $XX.X And credit our

moderate to will the but first in of half still XXXX, remain levels. elevated historical provisioning provisioning expect from We

us line positioned but added For the year, reserves, for and the million also future. relative which we metrics, impacted to full-year well bottom the $XX.X our performance

earnings $XX.X the per quarter, off reported caps net we $X.XX, earnings net $X.XX. with and share of of million share million full-year per which income of the and For $X.X income of

backdrop. record by significant strongest produced pre-provision history the our were company’s performance metrics team line While our our profits the in the impacted provisioning, pretax performance with bottom despite challenging

tangible plan commenced our company million of fourth over which $X.X to the or our the shares and value. of common are stock, were purchased book all During below successfully share XXX,XXX bought pleased announce repurchase we quarter,

overall addition building In to we strategy. our is of long-term a which our lowered reserves, energy concentration, part

clients relationships tightened the process reducing deliver earnings build have our and shareholders look our we to focused on than with We for serve. peer and We credit continuing better to risk. and communities returns by strong

I’m in and and modifications loan customers with are XX% our during pleased clients $XXX PPP payments. to report exemplified that modifications. the our our the approximately providing to quarter, to we making funding second In commitment the back Our modifications million businesses pandemic. full efforts through is of of provided

Additionally, we of Program Paycheck successfully X,XXX million almost and produced clients. $XXX loans PPP Protection the implemented for

our new focused We helping additional clients on existing funding secure second are and PPP. now through of the round

prior have by by which our DDA deposits growing Our significantly, compared XX% deposits year. also approximately grown to to enhanced account of deposits, total improved while total XX% the growth,

loan our Excluding bankers PPP delivered loans, of growth X%. year-over-year

prominent enter Country Kansas Club locations growing our rapidly City. in we feel on Plaza current our loan XXXX, new contributions about Frisco, location our from the we in and the market, in As more solid good expect pipeline Texas

Our continues XX% employees working pandemic of our on operate to team under plan, roughly rotations. with our

that I’m home, company While most has team pay for remained our our investments and to the our working scores engagement been continue employee of off. in high, from proud technology

efficiency focused growing capital. enhancing share per optimizing our and very on remain earnings by our also We our

again a we Our efficiency, efficiency talent the retaining focused And model. committed of XXXX. highly organic core the our improvement XXXX, very remain quarter and quarter, a remain to ratio growth best XX% as is on XXXX forward markets as company. Though fourth to one our Having as in the as recruiting best our the on of to look compared we falling strengths XX.X%, improved we to talent. to this been and have a quarter improvement X.X% focused compared fourth we of

we flexibility provides targets, and growth Our investments us strong acquisitions, incredible talent capital organic technology position as evaluate development. potential

would Dave average. for the recession I during better a is than optimism more turn by call the markets the national results. this the for Our enhanced O’Toole, serve the future CFO, further detailed the over to now of financial our we that discussion fact have to performed like

Dave O’Toole

Thank afternoon, you, Mike, everybody. and good

pretax last we As rate XX% and margin and Despite higher Net QX. again on operating X.XX% linked-quarter environment, to interest the basis points current mentioned, interest X% linked-quarter QX for basis fourth year. in strong pre-provision of $XX.X in X.XX% once quarter quarterly revenue. the to quarter basis quarter increased a a Mike fourth XX on had from net increased income income improved and than another the of interest million

of to as adjusted environment, pressure X.XX% X.XX% lower a much from year. driver declined we rates compression the NIM on full-year, primary margin to the downward the was For rate during

earned NIM ultimately the for margin. recognized the million fee linked-quarter on income fourth loan to improvement both fees on a PPP million quarter which and basis. for our company PPP a and fees $X.X the and helpful, contribution were to full-year, income of led of contributed The However, $X.X positive

on Additionally, the PPP nonaccrual. in of first of in NIM have and we PPP half are remaining loans a should able forgiven, are loans basis unearned record on million XXXX was income. income point XX a and fees NIM positively impacted slight to as impact funds fewer as positive our the of $X.X decline from cost

while compared slide, XXX from yields the same basis on have deposit interest-bearing the XXXX declined costs XXXX. to in full-year notice period you As declined when points XXX will XXXX, have points loan basis

margin compression persist expect rates in linger low XXXX. We will interest while

unrealized However, million $XX for $XXX and Borrowings in in an like X.XX% long-term quarter bringing during performed securities bankers, million accumulated well tax-exempt we QX basis The remaining rates more previous shorter fully of than recently, yield encouraged the million the most equivalent quarter, to average creating were see flows yield an equivalent improved rates decreased tax yield up portfolio and continues involve portfolio, quarter. the X.XX%. to securities matured X.XX% portfolio’s gains no the and at of year increased with to lower are and totaling had of as approximately curve. experience those purchased XX taxable most points of during million to consequently year-end XXXX. the flows, The $XX accelerated taxable maturities. effort $XX from borrowings an cash reinvest In $XX cash those to cost the million and securities generated sold prepayment of were speeds the

pre-provision impairment million and capital have time. we that this loss operating have outlook we million previous fourth the We X% pre-provision the reported million been full-year XX% to nearly pretax provisioning income, We year-over-year income the yet compared a sufficient excluding for unprecedented million the believe QX for XXXX. pre-provision quarter. to remains the and charge, revenue. the capacity manage $XX favorable, through would to loan for for The saw increase million to and full-year. required $XXX increase $XX and goodwill $XX.X absorb to for full-year of quarter be of compared $XX.X profitability Pretax to may Turning a

to down year, happy compared for was increased be continue income to year increase. the recognized risk growing Non-interest could focus adversely prior profit, I’m to that for the the due we year non-interest non-interest impacted on periodically in We to to take sold was the possible linked-quarter NIM. in interest $X.X the quarter. the downgrades. million environment. down pressure XX% report Swap basis securities million of in in revenue gains off or low a $XX.X a value, security rate a on and the portfolio income And the by substantially previous at Throughout securities year, pandemic the to due at income

expect service credit expenses charges in on X% However, X% overall and management from realize the other not to impact QX. team our in a and building items. fees, on we were we compensation-related taken salary basis excluding XXXX. contributed non-interest Non-interest other just card restructuring, basis a impairment begin it will linked-quarter in the year-over-year QX, additional improvement. when quarter charge materialize to income out increased did workforce up positive In from the costs the for optimizing had elevated and benefit the fully and QX, We but

we XX% compared working several have third elevated through costs increased expense increased from non-interest XXXX. including adjustment, to and quarters For as the problem mentioned, restructuring expenses goodwill items, expense credits. were by and this the But in fourth the non-recurring year year,

for year, Our assets per employee highest history. level company’s million the in is $XX.X the which the ratio reached

lower operating operating growing or have history yield nonrecurring We charges focus on the the the revenues continues We proven from efficiency to it despite year benefited expect discretionary previously. complements ratios fourth XX% pandemic subsides. to and and quarter of for efficiency once the positive during results. our XX% discussed spending The for noncore continue efficiency reported of and

priorities. efficiency and to improve pretax assets an see plan on compression X.XX%. non-interest average average to in-depth With pace for we and that turn our negatively of pandemic. past Chief we continue Likewise, during impact would pre-provision impacted had year to And be expenses, reported call provisioning the to we markets return expect invest Managing the top as EPS NIM will and and end. on We assets management over to return your Officer, a to more overview, XX quarter return margin growing credit. forward, same three prepare XXXX improved years. the our at questions that I XX% calculations. the look Rapp, our during forward company in opportunities the Looking and elevated arise to basis ratios assets people to We average ability the that and year on will for once for income end to for at Credit Randy I to the quarter answering the like now discussion points the

Randy Rapp

Thank continues need principal loan of of of portfolio report of And making have our to XXXX, some QX X% wind afternoon, full received of that beginning assistance. continues you, portfolio the and loan XXXX, program as businesses I’m year-end our payments. the a on Dave, most the XX% our good as to our and happy At deferral. better in this interest impact of the only pandemic back pandemic loan are kind customers of down and understanding to everyone. of of modification their payment roughly

customers many industries. those heavily and in senior are As still needing impacted the assistance anticipated, hotel of housing

with the We Our schedules. general we traditional improvements future. public. of about loans during that loans, as clients working the pleased most combination to be expect expect vaccines to the in vaccine payment the of how still in industries are our to unique The optimistic XXXX available bankers continued their closely us recent have period. and cautiously modified these of to us commitment clients with our last businesses return half their made with I’m to lead rollouts are continued their worked and this

a quarter. hotel offset upgrades, portfolio of or that also the The portion much downgrade by loan criticize the downgrade However, in of downs the to activity review QX. and did during portfolio we the was occurred refinances during pay

and it like, ratio X.XX%. assets the a working a quarter low from historical A high declined for would remains percentage of include and to proactively facility company are also points to and hotel few than from a levels. to assets stem non-performing we higher It a to we of Our loans have property, energy back housing XX reduce commercial the the non-performing The credits. to quarter total basis and prior portfolio industrial senior level continues ORE.

one million the charge-offs, million net part consisting we volatility For annual total XX primarily portfolio point we QX XXXX. for Many X.XX% or our portfolios, credit $XX.X loans, charged in X% charge-off pay energy quarter, discussed almost of a average charge-offs to $XX were and million downs down high loans. concentration and in the C&I the in approximately of to In recorded energy $XX previously C&I in portfolio, of year. pandemic of of energy bring across of by for the energy our XX% that off of and activity XXXX our in accounted had in the credits our total from and charge-off reduced total the XX% driven

especially target which We a oil, recently, the increased Commodity decrease portfolio. closer positive have portfolio. exposure total a energy long-term impact towards X% continue on to our loan of the prices to have of will

period. working hedging to the than could during migration to portfolio the positions higher due believe of for borrowing position price charge-off the we market energy X% and about our some positive but during environment to a optimistic up price enhance pleased counterparties our more after end spring universe carries our with expand classified loans, the we the portfolio Of of the to favorable year, base environment. cautiously special XX%. that challenging this total which see the in to Despite note grade redetermination are year, hedges the borrowers mentioned more remain continue counterparties, are we energy The and to. of the We remains more reserve sufficient. access this makes generally have We borrowers activity at that actively be conservative

for quarter directly across the approach remain related required proactive credit the provisioning Our migration loan for and changes incurred loan impacted portfolio for our quality grade We the reserve in loss XXXX. evaluating model of losses our on has and fourth allowance loan reserving full-year levels. the and elevation and the grade impacts

numerous validated loan our been reserve reviews XXXX. external throughout and through grading accuracy Our have

very Our excluding for XXXX X.XX%, lease business anticipate landscape total losses seeing loan as balances, improvement to loan allowance the loans strong a PPP we our loan in improves. at ended and grades and

activity, reserves who maintained occurred fourth that of the activity advantage slightly to program. the are take charge-off to During compared of during offset quarter, quarter. Street able as we mainly customers lending of our to The XXXX, result number loans of QX decreased much the main payoff the a again, from classified

third-party be back a well quarter had scenarios of continue in for and second loss to the We multiple stress portfolio the capitalized XXXX.

announced buyback our loan changed not this has will to earnings stock sensibly release last continue analysis, program Our and at we portfolio. the grow

in well by are relationship-based our culture flow We strong our confident portfolio We is proactive approach. believe diversified management and cash credit supported and lending. focused

impact our over operator our have see I to questions positive CECL quality. to now but believe parallel not might not back continue This are adopt potential do do run adoption remarks. churn portfolio reduced have cost growing it reserve I will analysis of answering on credit the our the we in to and pleased We any plans And Q&A of turn forward are we at and you of We the portion on PPP loan capital. begin to the up we but prepared replacing wraps forgiveness, shortly. the growth, to XXXX, look call. to

Operator

first Thank Jennifer question comes Demba. you. And your [Operator from Instructions]

Your line open. now is

Jennifer Demba

continue will your of will do think charge-offs in the in give little they evening. XXXX lower good derisk what think you kind or you idea of might Can bit? portfolio be do to XXXX, you us a be think an Thank you you. level net you

Mike Maddox

talk that? Randy, to I let you will

Randy Rapp

very Mike. we not Randy. at in in in but only Thanks, looking charge this down feel grade We activity were Jennifer, is migration, charge-off and right. like proactive XXXX. All

level well level So the me. historical would but to - XXXX XXXX see remaining significantly, we that expect below level, down XXXX in above come excuse that levels, probably is

Jennifer Demba

great. Okay, you. Thank

Operator

Your next Gailey question comes line from of KBW. of Brady the

is open. line now Your

Brady Gailey

good Hey afternoon guys. thanks

to ask I So wanted NPAs. about

right, NPAs spoke but I XX-days stable out C&I restructured NPA pretty we $XX when be to think I of and moved here going if linked-quarters. your remember ago, bucket, the the was million are credit

just talk NPA and quarter? this came what into out maybe bucket that about what So came

Randy Rapp

Sure, Brady. This Randy. is

the That number. credit. we about into is to You of flat for the a relatively we as a movement bit At did energy and some was quarter, slight it There call, little in bucket in that We C&I. did are correct. out had last QX. the little resolve, make the that CRE, bit across really talk movement And portfolios. in credit in said, a

Brady Gailey

higher And all heard I how you But for know this all then return of do in here, there was changed All well into like at has know then. a right. has changed the about for kind growth the ton And banking? comments mean, is this talent, of just I franchise, growth to but think when guys since you and you you growth your see in going growth, you versus I the double-digit hired when this this we to people. markets year operating going think were of IPO leverage. and roadshow, and world I there look story be to we lot your do a But growth of kind investing plan and about

Mike Maddox

at for since XXs. labor since the The lowest half our this looking it II. level first least the outlook it never stimulus in year. question. country probably great way right, is is been forward, Participation is World the I’m government has so hard early of War The see been force the is for in at higher Well, the to

think the figure from talent. to committed want want trying to technology innovation economic our be stuff in there very out entrepreneurial organic to excited outstrip there substantially better we are quality we smart. that a some are to still So will are we be to from to just But clients. allow we that about have invest to out, is growth to serve were company want model. growth I’m and continue credit a a going us prudent. And standpoint. We to on peers standpoint, we that working still We we We continue our be to

grow. I think to strategy well our continue positioned branch-light us to to allow business is

is to are growth, you other we that. look have we on drive when difference find enhance on will But our is look thing economy. to we focused to we opportunities, profitability the we depending place, we And the can are markets. it. We dependent efficiency, we that focused very right is also we to from attract to streams. on are to will would people, so at are which fee the in as really in great focused the on, aggressive where attractive say we going other Brady, the going ability the revenue double-digit get on But are talent we So I very continue improved to at continue continue have I tell a be will back to income. that our want ways markets, to And growth. be our our and try right roadshow can’t diversify we

Brady Gailey

impairment XXXX. roughly expense growth I growth X%. base I or expect grew Great. we just finally for in out earlier than it side what less Okay. on mean X% XXXX then that should the base. goodwill to the be in the I your happened Is call expense that? mean if the that in expense on And back it, me, could

Dave O’Toole

Dave. is this Brady,

at down would in difficult X% look at than much I it think about to growth further it is to that. It X% I pretty XXXX. bring

point in expense million non-interest now non-interest at us down at net and which We time. is XXX to million XXX have got efficient expenses range, pretty this for right

the probably number. better is X% to closer a So X% to

Randy Rapp

also you locations opened last scaled two year remember, yet. we haven’t new got to we Brady, Yes. that

to start a in and to City into grow grow grow last year. continue expand to to and Frisco expect Kansas to we couple expansion of So our

Brady Gailey

guys. me for it is That great. right, All

Operator

Stephens. And of Matt from question Mr. your from comes Olney line next the

Your line open. is now

Matthew Olney

the on expenses. want point last follow-up to on Great, thanks. operating just

that of, it, you want make of I X% to million. the $XXX the I right? expenses would X% XXXX David, think, understand sure I guess, base mentioned growth. that be to call full-year growth, I Is

Dave O’Toole

$XX million, A probably. little than less that,

take out you $XX expenses the million. If adjustment. goodwill at the PPP, PPP run not but item, the that Operating about

Matthew Olney

Got it.

commitments, balances Any Thanks over at growth And are Slide as XX, comment the the estate, you last mostly can I And last focus but on of on is utilizations, is loan of year. XX-months, clarification. last looking point. like I book, higher rates it anything Okay. the over color relatively provide growth far around that that the go? then it us is the any looks just you back you much think ex-energy, loan I’m adding the lower can like yes. year. those over commentary at growth flat residential this does been as on looking real of in strategy XX% for last it that mean then How discussion. can growing loans sure And was have year, Thanks. been utilization I looks there? give other you over adding side new the clients, the the C&I

Mike Maddox

fairly the and we loan utilization are I over some the to address and of I upfront stable seeing turn will Randy. rates But will then rates. it utilization growth, a

to right. of off. run of the the We numbers not growth loans big those PPP one net start we challenges million program, funded PPP seeing $XXX the early And mean, on and are is increases. loan then I in

were lending. And able that lot to a replace with so traditional we of

And pretty impacted think pleased utilization obviously of stayed consistent. kind that the So relatively C&I I the of PPP probably traditional our that, credit. are we loans

I So question. over will the some of Randy turn it out. that of for balances But, the to rest

Randy Rapp

Randy. it Yes. Matt, is Hey

feel CRE You in the in about CRE opportunities manage are the growth but We space. level, not at seeing at book concentrations, are type good see correct. do We we still good did that the level. property our We XXXX. only in those really

well terms construction concentration development. within put slide. are into in single of family. actually about talked that multifamily portfolio our and and regulatory We guidance One you category We CRE overall

And we the seen in of portfolio that opportunities. have where areas in so last to industrial And our significant then those today growth year one good CRE multifamily see be in continue portfolios. our we and was

Matthew Olney

today activity, the that for to thanks be far quarter, Great, in the fourth see as this still program, other cheap quarter. it to above active still where you fourth as tangible want the hear book the on one love to hand, Okay. the buyback great you in then we you value, on would stock is the hand, color. act how on exercise And are well but

would kind love how playing I see So just that of you hear Thanks. to near-term? out

Mike Maddox

the plan Matt, we continue and we price going on year, throughout have does. a making right that we it. execute execute continue will are evaluate place, are and not we to to But plan XXXX, to what to to our through got obviously are and it in plan, the modifications we depending now, going continue to

Matthew Olney

you. Thank Okay.

Operator

James. question of Rose Raymond Michael line of next comes your the And from

Michael Rose

afternoon. good Hey

look it dig or down Can like had the deposits quarter. some to of like. looks at some Dave, at a the the It maturing into expansion looking little little you ex-PPP like margin a what looks us the bit, portfolio. talking bit, - wanted this Just remind you you deposit are

got still a like time in deposits. That lever. percent You seems XX-plus

kind least walk Your if takes maybe and you XX through of and PPP? us for costs offer puts at Thanks. bps, quarter, are up, can might the what the expect you at first

Mike Maddox

Good afternoon Michael.

guy right. Raymond You call James tickets the Stadium, for to are we the

Michael Rose

mention to going was I that. Yes,

Mike Maddox

control margin is creates about to hitting to our us There lower our hole is rate we run a cost have done try our in that no of doubt it. pressure deposit rapidly What is Listen, and funding. all. of costs earnings. It

to $XX $XXX Quarter-over-quarter, As you can year, see million million funds in to the charts, is it of $XXX million. year-over-year, looking our million. we back have cost form lowered a $XX

in of identify funds points Our in think And about two today first to marginal probably that we points. we that we can additional five have the cost got reduction XX quarter. basis basis is

go is So to challenge to continue ahead our deposit costs. lower here and first

side, On too move the our asset investment portfolio doesn’t much.

We have stayed do the at It there is that active you the can municipal market. best moment. about in out the

the to it will our our all comes little have limited pressure margin overall compress yield on can margin, hold do in today. we we So bit we what can lending competitive it with likelihood, area see where investment at a to as if reduction In down portfolio. in the we It further. is

Now of the first will that, on the the happen PPP impact think, XXXX. of we in half bulk that,

are And on that recognition know, as forgiveness income. PPP of We for that the processing unearned actively loans. accelerates requests you

in. today. our a us come that So of year. hold help the first we little at margins think that of will the in, come lot where bit, And that will in half are A we will

program the sure is margin compression very fee are but but - new I But modest. my what first from quarterly going that would is to best in the to estimate. We standpoint. not quarters, a It standpoint. two look from do probably

Michael Rose

maybe Okay. And for is just helpful. one Dave. That then

does would there. that You that But any for your about would some just other to But you hires? that of talked some bit and markets know your thoughts down on the incorporate additional any expect Texas given expense would be expansion efforts expansionary relates before. out focused outlook, great. I be some of a I flesh talked little about can I have efforts. some potential as it guess, you

Dave O’Toole

Texas budget for anything - to is Texas. growth good hires have in markets. now new don’t as budget budget But that hires, in a there related and we our portion our our Well, do those we of to new right in expansion are

Michael Rose

for thanks taking my questions. Okay,

Dave O’Toole

Michael. Thanks

Operator

Mr. the from And Piper of of Sandler. your last line question Andrew Liesch comes

now is You line open.

Unidentified Analyst

(Ph) Hultquist] It for afternoon is on [Michael Andrew. good Hey

can growth growth. from market. Kind at loan bit was of here little what kind half growth downs starting of So you in customers it first than in taking expected. that think and look like possibly loan better off overall PPP Do a a - what ex-PPU the customers year? offset pay this are looks here demand core It with the loan

Mike Maddox

loan we grow the believe do to offset can pay We our core enough downs. portfolio

Unidentified Analyst

then it. it these core us Got on maybe them increased of And kind Can looks bringing color SNC customers? and bit the in a like you around geographically where quarter. some as remind are

Randy Rapp

participation, When balanced. look said, Randy. is we I bought buckets, and this Michael, Yes, very as are those have our sold entire at

to actively really not are get participations we new bought. So just trying into

relatively footprint. that other sole to with management the bought than are using company. that an They being the or on the counterbalance have do that are at treasury we in are able still our else new slightly So banking really side again, quarter, each opportunities. side management private during credits. with almost are versus know enter a but We so But dollars And some that $XXX or team, there eye other - the that is million. SNC the low on something less just increased and opportunistically we to deposit

Unidentified Analyst

borrowers, credit. guys operating provide color or maybe occupancy Understood. over And activity on the some you on of then your gears Can levels? hotel switching to any

Randy Rapp

Sure, is Randy Michael. again. It

portfolio are impacted. obviously We hotel obviously closely industry with That working our has that been negatively tracking our borrowers. is an

entire it fat locations, And it bad the not really is is operators, so industry.

it And so to be is of probably the before any return hear you what is of the in pre-COVID most going of you get to industry clients levels. and into XXXX semblance type

to And XX-months. the are for And sort is so There well. just There I the it next the struggling that that you or is borrowers doing third about break is at XX-months a gap. that of the is actually look than bridge into breakeven. more others third work And portfolio, fairly third when to we is really it a trying thirds. to with that

And better sometimes because expenses. the you the so that are but RevPAR low, high, is meet not ADR occupancy, I really but caution track do is to we is operating if number really able a occupancy

comment that portfolio. properties. help last guarantors on and sponsors the have So And support all we again, their up really our stepped third RevPAR portfolio a and to of really about track space But that is across third our third. in of

And equity we also guarantors sponsors and bridge XX-month those said, a to that inject help, But on I percentage have deferral. so to have fair seen additional got as anticipated, that as of gap. we XX-months

Unidentified Analyst

And Okay. will with I you, then Randy here. stick

down the Regarding managing that Any on X%. of to that? cadence energy idea exposure

Randy Rapp

we space, can some will when it activity $XX Well, a obviously, also you But into of portfolio will oil, that that not our area, hedges, And the I spot. and environment it refinance But the price at in faster with in additional increase but obviously sort probably our at we current the then not this as XXXX. is layer the if $XX at of customers gas, just attracting space. curve, think into out five at at But start mean, that a percentage only price look oil. starts is for watch well. the positive, the than in environment portfolio, capital

we activity And expect acquisition level. this some so higher price to increase at

growing shrinking I the there think bit, is So we got that the rest portfolio of are around a two that we the it. is, we continually will portfolio one and then and just that, is things watch

Mike Maddox

is to just strategy. medium this would I a add, long-term

we want not we are overtime, drive to of anything percentage trying down that that portfolio X% grow, our as range. We We do radical. in try to just to

Unidentified Analyst

And is Understood. here. the And margin on rate to housekeeping be point right the at then from PPP What forward? looking tax then quarter? impact last basis item going the last one

Randy Rapp

effective I forward was an XX use - last The going to say, for impact may tax double points, have would PPP about I I’m rate to your quarter that. XX.X% but modeling. going of check basis

presentation. was I lot the my had significant. of We forgiveness a think pretty quarter. was it in fourth It in

able on million So the regular fees fee accelerate of we quarter. to of the amortization income the were of top during $X.X

we it about was believe $X.X impact. XX million. had point I So basis

Unidentified Analyst

much so taking Thanks questions for my guys. Awesome.

Randy Rapp

bet. You

Operator

Mr. time. you no There at other continue. questions Matt are Needham may this

Matt Needham

several In Thank for interest have closing, the with be you Take Kansas that with as you you your call we any replay team, we the can accessed contact you call a might Again, us next years. excited Please of in on And opportunities taking have. hope as are again in Chiefs weeks. for can at we the this our today. appreciate questions over joining the coming proud reminder, via support for and follow-up our care. company me as time know company, we afternoon. this you and/or us our quick and website. a And thank investment always, city

Operator

concludes Thank you, participating. and this for Ladies today’s everyone, conference. gentlemen,

may disconnect. You now

CrossFirst Bankshares (CFB) 29 Jan 212020 Q4 Earnings call transcript